IN THE NEWS #448 - OPEC/Oil Prices

By Jerilyn Watson

This is Steve Ember with the VOA Special English program IN THE NEWS.

OPEC leaders met this week in Venezuela for the fortieth anniversary of the Organization of Petroleum Exporting Countries. The two-day meeting ended Thursday. The final statement listed twenty points.

The leaders promised to protect the environment and the rights of developing nations. They said they would look for new sources of energy. And, they agreed to meet every five years. The only other time OPEC leaders have gathered was in Algeria twenty-five years ago.

As expected, the Caracas Declaration did not say OPEC would lower oil prices. Instead, it urged rich countries to lower their taxes on gasoline and heating fuel.

Recently oil prices were at their highest levels in ten years, well above thirty dollars a barrel. A decision by the United States to use thirty-million barrels from its emergency supplies has helped lower prices. In Belgium Friday, European Union finance ministers discussed using E-U supplies, but made no decision.

A statement in Caracas from Saudi Arabia helped lower prices, too. Crown Prince Abdullah said his kingdom was willing and ready to produce as much oil as needed to calm the market. Saudi Arabia and Kuwait are the only nations believed able to increase production.

Oil prices ended the week at around thirty dollars a barrel. OPEC members said they want oil to cost between twenty-two and twenty-eight dollars. The organization will release an extra eight-hundred-thousand barrels of oil a day beginning in October. OPEC President Ali Rodriguez of Venezuela says the increases should help bring prices below twenty-eight dollars a barrel.

The eleven nations of OPEC produces less than half of the world's crude oil. But their exports are more than half of the oil traded on international markets.

Just two years ago, oil prices were very low. OPEC almost failed. Now things are much different.

Still, there were some tensions at the meeting. Iraq wanted OPEC to call for an end to the United Nations economic restrictions against Iraq. But Saudi Arabia and Kuwait blocked that proposal. The U-N placed the restrictions after Iraq invaded Kuwait in Nineteen-Ninety. Earlier this month, Iraq said Kuwait was stealing Iraqi oil.

Venezuelan President Hugo Chavez has been widely praised for helping to unite OPEC. Mr. Chavez spoke before the closing ceremony in Caracas. He said the organization would supply oil to world markets, but at prices it considers fair. He urged member nations to resist international pressure to lower prices too much.

The Venezuelan president also suggested a meeting with leaders of oil-importing industrial countries. He said OPEC should defend poor countries by discussing the foreign debts, unequal terms of trade and other issues they face.

This VOA Special English program IN THE NEWS was written by Jerilyn Watson. This is Steve Ember.

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